Housing providers funded by the GLA are required to advertise their London Living Rent properties on the GLA’s Homes for Londoners property search tool.
Where there is more than one eligible applicant, housing providers should determine priority through use of a local intermediate waiting list (if one exists), by using a priority group or groups identified by the local borough or, as a last resort, on a first-come first-served basis.
As set out in the London Plan 2021, local authorities and housing providers can choose to introduce additional prioritisation criteria, beyond the London-wide eligibility criteria outlined above, for the first three months of marketing an intermediate home. However, these eligibility and prioritisation criteria must cascade to the London-wide eligibility criteria if the home has not been let after the initial three month marketing period to ensure that homes are not left vacant.
Housing providers will be expected to satisfy themselves that households can afford to both pay the rent and accumulate savings, using standard affordability tests.
London Living Rent is an intermediate affordable housing product, with rents based on one third of average local household incomes. London Living Rent is targeted at middle-income households working or living in London who are looking to build up savings for a deposit to purchase a home.
Eligibility for London Living Rent is restricted to Londoners that either have a formal tenancy (for example, in the private rented sector) or live in an informal arrangement with family or friends as a result of struggling with housing costs. In addition, eligibility is restricted to households with a maximum gross household income of £60,000 and those who are not currently able to purchase a home (including through shared ownership) in the local area. See ‘Allocations and priority’ above for more details on how London Living Rent homes are allocated.
When funded through the GLA’s Affordable Homes Programmes, London Living Rent is expected to actively support tenants into home ownership within ten years.
The GLA publishes maximum monthly rents (inclusive of service charges) by number of bedrooms for new London Living Rent homes in every ward in London, and updates these figures each year. The latest update was in January 2024, for London Living Rent homes let in financial year 2024-25 (the previous figures are also provided below for reference). Housing providers have the flexibility to set rents below these levels if they wish, however rent levels must not exceed the benchmarks at the time of each new tenancy.
The rent levels are derived from average local incomes and ward-level house prices using a multi-stage process, set out in the PDF note at the bottom of this page. Broadly, the rent for a 2-bedroom property is based on one-third of the local median household income. Across London, the average benchmark rent for a 2-bedroom property is around £1,240 a month, or about two thirds of the average monthly market rent in London of £1,877 reported by the Office for National Statistics for October 2023 (the most recent figure available at the time of writing).
Rents for London Living Rent homes vary according to their number of bedrooms. Using the two-bedroom rents for each ward as a benchmark, the rent for a 1-bedroom home is 10% lower; for a 3-bedroom home a maximum of 10% higher; and for a 4-bedroom home a maximum of 20% higher.
As a final affordability safeguard, the rent for any individual home must be at least 20% below its assessed market rent. In addition, London Living Rent benchmarks are capped at £1,400 a month for all homes (inclusive of service charges), which ensures that the homes remain affordable to household incomes up to £60,000.
London Living Rent homes will be available to households on Assured Shorthold Tenancies, with the rent allowed to increase by up to the rate of CPI inflation each year. On re-let, the rent should revert to the applicaple London Living Rent level, or lower.
The GLA encourages housing providers to help as many households as possible over the lifetime of each London Living Rent home and, in order to ensure stability, does not expect tenants to be required to move for at least three years from the start of their tenancy. Housing providers delivering London Living Rent homes without direct GLA involvement are able to choose appropriate tenancy terms.
London Living Rent homes should enable tenants to put themselves firmly on the route to home ownership. Housing providers are expected to take into account prospective tenants’ ability and inclination to save as part of their affordability assessment and to actively support tenants into home ownership within ten years. In most cases, tenants should be offered their current home on shared ownership terms at any time during the tenancy. If no tenant has taken up that right within ten years, in most cases, the provider would be expected to sell it to another eligible purchaser on a shared ownership basis.
Build to Rent providers intending to retain long-term ownership of a whole block are not required to sell London Living Rent properties as shared ownership. Where the property is not grant-funded by the GLA the provider may choose to retain the properties as London Living Rent for a longer-period of time (where this is the case it should be made explicit to the prospective tenant that there is no right to shared ownership). Where the tenant does not have the right to purchase the homes in which they live on a shared ownership basis, the landlord (or group companies), if they are also building shared ownership, will be expected to provide advice and assistance in relation to other shared ownership homes, should the tenant wish to purchase one.
As set out in the Affordable Housing and Viability SPG, the GLA expects the affordable housing ‘offer’ on Build to Rent developments to comprise discounted market rent, managed by the Build to Rent provider and delivered without grant. The Mayor would prefer the discounted market rent to be at London Living Rent levels throughout, but the SPG also provides details on other options. Rents could bet set at the London Living Rent level at the start of each tenancy, or the discount to market rents could be fixed at a rate that makes the rent equivalent to the London Living Rent rate for the initial letting, with this discount then being applied to the current market rate for the development at the start of each new letting. In either case rent rises should be limited to the CPI growth rate within tenancies.
Several councils are also interested in delivering London Living Rent on new or ongoing schemes, whether through the Housing Revenue Account or through separate companies. The GLA will work with interested boroughs to identify any obstacles to council-led London Living Rent delivery.
